Increasingly concerned, key voices are sounding the alarm. In February 2020, Christine Lagarde, president of the European Central Bank and former head of the International Monetary Fund, warned that a cyber attack could trigger a serious financial crisis. In April 2020, the Financial Stability Board (FSB) warned that “a major cyber incident, if not properly contained, could seriously disrupt financial systems, including critical financial infrastructure, leading to broader financial stability implications.” The potential economic costs of such events can be immense and the damage to public trust and confidence significant.
Two ongoing trends exacerbate this risk. First, the global financial system is going through an unprecedented digital transformation, which is being accelerated by the Covid-19 pandemic. Banks compete with technology companies; technology companies compete with banks. Meanwhile, the pandemic has heightened demand for online financial services and made work-from-home arrangements the norm. Central banks around the globe are considering throwing their weight behind digital currencies and modernizing payment systems.
Second, malicious actors are taking advantage…
